Companies have traditionally outsourced work associated with certain technology projects to third-party consulting firms to reduce costs and obtain expertise in a given area (e.g., software programming). Many of these companies (or the third-party consultant used by those companies) have been leveraging offshore resources in countries such as India, Russia, and China, to further reduce costs. Historically, these offshore resources have been hired directly by the business entity/third-party consultant or have been sourced through sub-contracting firms, consulting partners, or as independent contractors.
Freelancing is a relatively new trend that allows companies to source freelance talent from around the world for all types of work. Websites that facilitate freelancing have become popular for identifying and managing freelance talent for a wide variety of tasks. However, while startup companies (“startups”) and small businesses are increasingly using such websites to source talent (i.e., identify and employ freelancers), mid-size and large companies have refrained from using these websites to a great extent. These larger entities instead continue to hire in-house staff to handle the sourcing of talent or outsource the work to third-party consulting firms.
There are several reasons for this, such as the lack of verification of project managers or of freelancers, the need for a team of freelancers, and the lack of ownership and accountability for delivery. Consequently, most (if not all) freelancing-related websites target startups and smaller companies because the above issues are not as important to these entities.